HARP 2.0: Do You Qualify?
Established in March 2009, HARP, which stands for Home Affordable Refinance Program was part of the Obama Administration’s response to disturbing statistics showing that as the economy dove, as many as 5 million American homeowners were underwater (or nearly so) with their mortgages. HARP, part of the HAFA (Home Affordable Foreclosure Alternatives) effort, sought then-- and still seeks-- to help homeowners keep their homes.
It’s easy to get acronym overload when you start trying to study these programs, but read on. This blogger promises not to use any more lingo than absolutely necessary.
The original version of HARP wasn’t very helpful, mainly because the only people eligible for the program held mortgages with a loan-to-value ratio between 80% and 105%. Unfortunately, the majority of homeowners living in the hardest-hit portions of the country couldn’t qualify for that ratio; anyone who reads the news is aware that as the economy worsened, many American real estate markets lost 50% or more of their value. As a result, records show that fewer than 900,000 people used HARP to avoid foreclosure from 2009 to 2011, at which point President Obama announced his intention to overhaul the program.
HARP 2.0, the revised version, went into effect in December of 2011. This version was available to borrowers with a loan-to-value ratio of less than 105% at first and then included borrowers with a loan-to-value ratio greater than 105% in the first quarter of 2012. Now, all homeowners can sign up to refinance under the program, no matter how much value their homes may have lost. The only proviso is that loans must be held by Freddie Mac or Fannie Mae, and must have started before May 31, 2009.
Other Features of HARP 2.0
- Appraisals and Underwriting Requirements Rescinded: Making the process much more streamlined, most applicants won’t need an appraisal not underwriting for loans.
- Lower Fees or No Fees: Before, “riskier” borrowers might have incurred higher fees, perhaps too high for some prospective applicants seeking to refinance into mortgages with shorter terms.
- Extended Deadline to Apply: The application deadline for HARP has been extended to Dec. 31, 2013.
Are You Eligible?
Basically anyone with a loan that started prior to May 21, 2009 can apply to refinance with HARP 2.0, but the mortgages have to be held by Fannie or Freddie. You can check if yours is held by either agency with these links:
Phone number: 1-800-7FANNIE (8 am to 8 pm ET)
Phone number: 1-800-FREDDIE (8 am to 8 pm ET)
We’ll revisit HARP later when we look next at HAMP, another program to help homeowners, as well as 2MP and PRA, two more such programs. Until then, bear with us for one more acronym: With the deadline of December, 2013, you do have time to take advantage of HARP 2.0, but studying these programs available to you should start ASAP.
Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in theSan Francisco Bay AreaandPacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert
Photo credit: Florida Mortgage Blogger